Residential property sales in August fell in Metro Vancouver. But the sky didn’t.
In the first full month since the BC government implemented its new 15 per cent tax on foreign nationals buying property in Metro Vancouver, residential sales slipped 22.8 per cent from July.
But it’s still too soon to tell how much of the decline in residential property sales is due to foreign buyers avoiding the tax. August is typically one of the slowest months of the year because so many people are out of town on vacations and families are getting ready to send their kids back to school.
We’re only 30 days into the new tax and there’s not enough data yet to accurately say what it’s going to do to the local residential property sales.
Dan Morrison, the president of the Real Estate Board of Greater Vancouver, said the biggest effect of the tax so far has been to create an air of uncertainty as buyers and sellers wait to see how it will play out.
“We’ll be interested to see the government’s next round of foreign buyer data,” said Morrison.
In July the government released its first survey of home sales to determine the impact of foreign buyers on prices. It said only 5.1 per cent of all home sales in Metro Vancouver from June 10-29 were to foreign nationals. The government has yet to release more current statistics.
Residential property sales in August below 10-year average
The 2,489 residential properties sold in Metro Vancouver last month is 26 per cent less than the 3,362 sales in August 2015, 10.2 per cent fewer than the year before that, and only one per cent lower than the 2,514 sales in August, 2013.
Historically, the number of sales last month was 3.5 per cent below the average for August over the past 10 years.
Morrison said the red-hot property market of earlier this year has been cooling for a while.
“Sales have been trending downward in Metro Vancouver for a few months.”
While the volume of sales may have slipped, prices are still robust. The benchmark price for typical residential properties in Metro Vancouver is $933,100. That’s 31.4 per cent more than August 2015, and 4.9 per cent higher over the past three months.
And the market is still favouring sellers as the ratio of sales to active listings for August was 29.3 per cent. Analysts say prices don’t start falling until that ratio dips below 12 per cent.
“We continue to see an imbalance between supply and demand in most communities,” said Morrison.
Residential property sales in August still strong for New West condos
In New Westminster, the condo market is still really strong. We’re seeing lots of demand and little supply. Many properties are getting multiple offers. The benchmark price for a condo in the city was $375,600 in August, 1.9 per cent more than July and a 28.2 per cent increase over the last year. The typical single family detached home in the city sold for $1,104,100, a .5 per cent increase over July and 34.3 per cent more than a year ago.
In Burnaby, the market was stronger in the eastern part of the city than the north or south. The benchmark prices for a typical residential property in East Burnaby went up 1.3 per cent over July to $869,500. That’s 27.6 per cent more than August, 2015.
In North Burnaby the composite benchmark price only went up .2 per cent to $780,200; but that’s still 30.3 per cent more than a year ago.
And in South Burnaby, the composite benchmark price actually fell .2 per cent from July to $867,500; a year ago a typical property in the area cost $654,100.
There’s no doubt residential properties are taking a little longer to sell than they did in the spring. That’s especially true in the higher-end products geared to the luxury and investor markets. And we’re not seeing huge unexpected prices anymore.
Strata properties are still hot, and they’re likely to be unaffected by the tax. We achieved some record prices in August on those types of properties in New West, Vancouver and Cloverdale.
Once the shock of the foreign buyers tax wears off, we’re likely to see a very active, balanced market in the fall. Homes with great layouts in good locations will continue to generate high demand and bidding wars. We’ve already got four properties listed in the first week of September!
August stats package